Bids continue to rise for SpectraSite Holdings as market players speculate that the company and other tower names may choose to follow in the footsteps of competitor Pinnacle Holdings, which recently announced its prepackaged bankruptcy plan. The numbers are poor and the bids are getting firmer, one trader explained about tower companies. Dealers said that tower companies might look to clean up their balance sheets in such a manner that their bonds will get a haircut and the bank debt will be reinstated at par. SpectraSite, with its stock trading at 35-36 cents last week, could be a candidate for this type of restructuring.
A few small pieces of SpectraSite's paper is believed to have traded in the 91 context last week. At the beginning of this year tower companies, such as American Tower, SpectraSite Holdings, and Crown Castle Communications traded off two to four points following news of weak cell phone subscriber growth, dealers said. Traders quoted American Tower at 90-92, SpectraSite in the mid-80s, and Crown Castle at 98 1/2 (LMW, 1/27). A spokeswoman at SpectraSite could not comment on the rumors. An official at American Tower said, "American Tower does not have any plans for a prepackaged bankruptcy or any bankruptcy event." W. Benjamin Moreland, Crown Castle cfo, did not return calls by press time.